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Big Problems for Crypto-currency: Quadriga
February 5, 2019
7:05 am
Loonie
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February 5, 2019
8:51 am
Vatox
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I think it’s unbelievable that people use crypto. There isn’t anything backing it. A true independent currency can’t exist because someone needs to hold the funds and Crypto is ripe for fraud and hacking.

February 5, 2019
9:42 am
mmlt
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"Crypto is ripe for fraud and hacking"

Can't argue with that. The main aim of cryptocurrency is be your own banker without dependance on institutions. Once you deposit your bitcoin elsewhere you relinquish control. Exchanges and web based wallets are NOT banks and not regulated.

The Quadriga story is fascinating. The chain of events scream exit plan and thievery. I can see a movie coming.

February 5, 2019
12:21 pm
Norman1
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There's no sign of fraud yet with the QuadrigaCX situation. Just incompetent succession/contingency planning.

The bitcoins are not missing. The challenge is that the deceased didn't give a second person a copy of the cryptographic keys needed to transfer ownership of those bitcoins. So, they are stuck in QuadrigaCX's wallets.

Sort of like a bank branch manager getting hit by a car without giving someone else the lock combination of the vault to open in the morning.

More details are in subsequent story CBC.ca: QuadrigaCX granted creditor protection while it searches for $250M in cryptocurrency. The story title is poorly worded. Title suggests that they can't find the cryptocurrency. Instead, it is the keys to the cryptocurrency that they can't find.

February 5, 2019
5:03 pm
Vatox
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How do you lose keys? Shouldn’t they be in the database and linked to accounts or on a super secure server? It’s pretty hard to believe that they can be lost or that only one person has that info. Where is the backup that should run daily?

February 5, 2019
5:14 pm
Top It Up
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Yep, a business built on the concept of cold storage and hot wallets.

February 6, 2019
10:04 pm
Norman1
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Vatox said
How do you lose keys? Shouldn’t they be in the database and linked to accounts or on a super secure server? It’s pretty hard to believe that they can be lost or that only one person has that info. Where is the backup that should run daily?

QuadrigaCX wasn't a regulated Schedule I chartered bank.

The "super secure server" with all the keys was the deceased's encrypted laptop that he was carrying around.

Estate has the encrypted laptop and will be turning it over to lawyers for the creditors and court-appointed monitor. It is quite secure as only the deceased knew the decryption key for the contents of the laptop.

It appears to have been a business with no fixed offices or other directors. "Most of the business was being conducted by Gerry [the deceased] wherever he and his [laptop] computer were located."

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